As compared to irrelevant cost, occurrence of relevant costs must be in future. Relevant costs are affected by a new decision. Irrelevant costs have to be incurred irrespective of a new decision. The relevant costs affect the future cash flows, whereas the irrelevant costs do not affect future cash flows.
Decisions made by team of individuals or single person, whether to outsource products or in-source are classified as
Difference that exists between total revenues, can be earned from two different alternatives is termed as differential revenue. Differential revenue is the difference in sales that will be generated by two different courses of action. The concept is commonly used when evaluating which of two (or more) investments to make in a business.